Rs. 20b for just 8 schools and Rs 31b for the rest of education sector?

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Jang news aka owner of the news and geo news are so irresponsible along with express tribune. Bunch of pessimist fcuks that give only bad news for viewers. Ban them and I assure you Pakistanis will be a lot happier.

The other channels aren't so bad

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"No one can make you feel inferior without your consent." --Mrs. Roosevelt.

ISLAMABAD:
Suffering from militancy, sectarian violence and a separatist insurgency – the country’s top political and military leadership is betting on trade to uplift Balochistan.

The decision to open at least two more border crossing points with Iran and Afghanistan in Balochistan appears to be the first step towards a plan to create ‘vital links’ to transform the province into a transit route between South and Central Asia — a proposal given the green light by the United States, but one that may affect Islamabad’s relationship with one of its closest ally, China.
According to officials familiar with the development, the top political and military leaders met in Islamabad last month to tame what some participants called an ‘active insurgency’ in the province.
The huddle to address the breakdown of law and order and missing persons in Balochistan was presided over by Prime Minister Yousaf Raza Gilani and attended by Chief of Army Staff Gen Ashfaq Parvez Kayani and Inter-Services Intelligence (ISI) chief Lt Gen Zaheerul Islam.
The meeting that came on the heels of calls by top political leaders to curtail the role of the military in Balochistan also decided to form a six-member committee to spearhead dialogue with rebel Baloch chieftains.
At least three top officials, including a federal minister, told The Express Tribune that the top leadership was unanimous on addressing the Balochistan imbroglio with a mix of political means and economic measures.
“One thing that we all agreed was that the youth in Balochistan don’t have many opportunities to earn. There is no industry in the province, no agriculture. So we decided to give them a chance to have cross-border trade,” said the federal minister, who attended the meeting.
Currently, there are only two active international crossing points between the two countries – one at Taftan with Iran and one at Chaman with Afghanistan. However, these facilities are being used as transit points for smuggling.
Another official, requesting anonymity, told The Express Tribune, that a decision had not been taken yet as to where the crossing points would be established, adding that they could be located anywhere between Jeewani and Lasbella.
The official went on to add that another crossing point may be established in Khyber-Pakhtunkhwa, while at least two would be set up in Balochistan.
Published In The Express Tribune, June 13th, 2012.

The Government of Sindh unveiled a Rs577 billion budget for the fiscal year 2012-13, Express News reported on Monday.

Provincial Finance Minister Syed Murad Ali Shah announced the budget.

During his speech, Shah mentioned that around 40% of the total budget have been allocated to developmental projects.

“We have reduced our non-developmental expenditure during the last few years,” he said.

He further added that the estimated revenue for year 2012-2013 is also 25% higher than the last year.

Entailing a capital of Rs570 billion and a deficit of Rs7 billion, the budget has allocated Rs20 billion for local governments which neither been restored nor dissolved under the Sindh Assembly Act.

According to a copy of budget obtained by Express News, an amount of Rs12 billion has been allocated for the health sector, while Rs9 billion will be spent on education.
Rs35 billion has been reserved for foreign projects, while Rs14 billion has been allocated for the projects funded by the federal government.

The budget has shown a growth of 40%, breaking the record of all the previous budgets.

The European Parliament’s plan of doing more “for poorer countries” has opened trade gates for three new countries including Pakistan.

The new rules will enable Pakistan, Philippines and Ukraine to apply for zero duty access on their exports to the EU under the “GSP+” incentive scheme, according to a Parliament statement.

“The new EU trade scheme is more predictable and more generous to countries that deserve it,” said British Conservative MEP and Legal Affairs spokesperson, Sajjad Karim. Pakistan will be allowed to apply for zero duty access if they agree to abide by the 27 international conventions in the field of human rights.

The new rules will reduce the number of countries that enjoy preferential access to EU markets from 176 to around 75. It will also reduce the total value of imports that qualify for EU preferences from 60 billion euros in 2009 to about 37.7 billion euros in 2014.

The updated generalised system of preferences (GSP), the Parliament informed, removes tariff preferences, such as reduced or zero duties, for EU imports from countries where per capita income has exceeded US 4,000 for four years. This rule ousted Russia, Brazil and Saudi Arabia from the beneficiaries list and will now have compete on an equal footing with the EU in world markets. Latin American countries Argentina, Brazil and Uruguay remained out of the benefitting list.

The GSP plus scheme will contribute to the promotion of human rights, democracy and freedom of speech in the developing world, added Karim who is also Chairman of the European Parliament Friends of Pakistan Group.
“The European Parliament Friends of Pakistan group has been campaigning to increase the threshold of the GSP+ scheme to allow Pakistan to enjoy more trade with the EU.”

He also dismissed the few MEPs who called for Pakistan not to be included in the trade scheme in a European Parliament debate on Monday.

“The clear long-term strategy is for the EU and Pakistan to cooperate on a wide range of issues including trade, security and policy. The EU-Pakistan Five Year Engagement Plan and the recent successful launch of the first Strategic Dialogue in Islamabad this month with Baroness Ashton is clear evidence of that,” he added.

Karachi—Consul General of Malaysia, Abu Bakar Mamat said that Malaysia and Pakistan recorded 25 and 10 per cent increase in bilateral trade in 2010 and 2011 respectively.

The positive growth was subsequent to the signing of FTA (free trade agreement) between the two countries in 2007. He added that there is a need to create awareness among the manufacturers on the liberalisation of trade in goods and services and the elimination of tariff on their respective products.

He mooted the idea to hold seminar both in Pakistan and Malaysia in this regard. Addressing a luncheon meeting at the Korangi Association of Trade and Industry (KATI) on Wednesday, the Malaysian diplomat said that a Malaysian company will start the upgrading work of M-9 dual carriageway from Karachi to Hyderabad and the work is expected to start very soon.

Responding to a question on Malaysia Airlines’ decision to cease operation in Pakistan earlier this year, he said that it was part of the airline’s route rationalisation and that the closure of its operation has nothing to do with the law and order situation in Karachi.

He also said that Malaysia is currently importing rice mainly from Thailand and Vietnam and Pakistani rice exporters may want to be more aggressive in penetrating Malaysian market and increase their exports.

With regard to the trade imbalance with Malaysia, he advised the Pakistani manufacturers to re-energise and revitalise branding efforts of their manufacturing goods for export to Malaysia. He informed that Malaysia and five other ASEAN members have signed ASEAN Free Trade Agreement and Pakistani exporters can make Malaysia as the hub to enter ASEAN market of 600 million population.

The Government of Sindh unveiled a Rs577 billion budget for the fiscal year 2012-13, Express News reported on Monday.

Provincial Finance Minister Syed Murad Ali Shah announced the budget.

During his speech, Shah mentioned that around 40% of the total budget have been allocated to developmental projects.

“We have reduced our non-developmental expenditure during the last few years,” he said.

He further added that the estimated revenue for year 2012-2013 is also 25% higher than the last year.

Entailing a capital of Rs570 billion and a deficit of Rs7 billion, the budget has allocated Rs20 billion for local governments which neither been restored nor dissolved under the Sindh Assembly Act.

According to a copy of budget obtained by Express News, an amount of Rs12 billion has been allocated for the health sector, while Rs9 billion will be spent on education.
Rs35 billion has been reserved for foreign projects, while Rs14 billion has been allocated for the projects funded by the federal government.

The budget has shown a growth of 40%, breaking the record of all the previous budgets.

Karachi—Consul General of Malaysia, Abu Bakar Mamat said that Malaysia and Pakistan recorded 25 and 10 per cent increase in bilateral trade in 2010 and 2011 respectively.

The positive growth was subsequent to the signing of FTA (free trade agreement) between the two countries in 2007. He added that there is a need to create awareness among the manufacturers on the liberalisation of trade in goods and services and the elimination of tariff on their respective products.

He mooted the idea to hold seminar both in Pakistan and Malaysia in this regard. Addressing a luncheon meeting at the Korangi Association of Trade and Industry (KATI) on Wednesday, the Malaysian diplomat said that a Malaysian company will start the upgrading work of M-9 dual carriageway from Karachi to Hyderabad and the work is expected to start very soon.

Responding to a question on Malaysia Airlines’ decision to cease operation in Pakistan earlier this year, he said that it was part of the airline’s route rationalisation and that the closure of its operation has nothing to do with the law and order situation in Karachi.

He also said that Malaysia is currently importing rice mainly from Thailand and Vietnam and Pakistani rice exporters may want to be more aggressive in penetrating Malaysian market and increase their exports.

With regard to the trade imbalance with Malaysia, he advised the Pakistani manufacturers to re-energise and revitalise branding efforts of their manufacturing goods for export to Malaysia. He informed that Malaysia and five other ASEAN members have signed ASEAN Free Trade Agreement and Pakistani exporters can make Malaysia as the hub to enter ASEAN market of 600 million population.

KARACHI: An emerging economy, by definition, has the potential to grow more significantly than a developed economy. If Pakistan is one, then, logically speaking, all our efforts should push for a proper policy framework that will help us realise this underlying growth potential.

During the 2008 global supply shocks, concerns over the dollar to rupee exchange rate depreciation and inflationary pressures were pushed to centre stage in Pakistan. These became a source of fear to policy makers, who clung to the general mantra of curbing inflation. The prescribed antidote was monetary tightening, which has since been complemented by calls from the IMF to withdraw subsidies.

The prescription was more ad hoc than well thought out, since it fundamentally failed to achieve what it set out to do – ie, attract more foreign exchange so that foreign exchange reserves were adequately replenished to support the value of the rupee and restrain the second bout of inflation that would have been caused by its depreciation.

This is an apt example of how inert economic theory can be in achieving economic targets, when implemented in true word and spirit. Even at a discount rate of 15%, real interest rates in Pakistan remained negative. In addition to that, unusual increases in interest rates can also have the signalling effect of economic distress; something far from helpful for any economy.

Let’s walk through a simple example of a hypothetical company with high financial leverage to see what can be presumed to have happened. The company records sales of Rs10 billion; assets of Rs12.5 billion (based on an asset turnover of 0.8, which is usual for a manufacturing concern); interest rate (pre-monetary tightening) 10%; interest rate (post-monetary tightening) 15%; debt to assets ratio of 50% (within State bank’s limit of up to 80%); an earnings before interest and taxes (EBIT) margin of 12%; and a tax rate of 35%. The result is given in Table One above.

The interest rate hike substantially decreases net profitability and the interest coverage ratio, making the company less palatable not only for an equity investor but also for debt providers. Given this, it is not surprising that not only did FDI, but private sector credit growth also has gradually dried up since the central bank took a hawkish monetary policy stand.

Now complement this with another policy: that of withdrawing energy subsidies. Withdrawal would have the effect of reducing gross and EBIT margins, pushing companies even more out of profitability. Any adjustments in prices charged to consumers would result in inflationary pressure. Perhaps these are some of the reasons why core inflation in Pakistan has been stubborn and remained in double digits.

A very simple solution to Pakistan’s economic revitalisation is that of combined monetary and fiscal stimulus. Obviously, the delicate balance between the much-needed stimulus and extravagance will need to be managed with extreme caution, finesse and responsibility.

Having lower interest rates seems to be a good means to breaking the pervasive economic stupor. The solution, however, seems too obvious to be believable. Let us see how it would work: the results are summed up in the flow-chart above.

A simple hypothetical example in Table Two illustrates the type of relationship between M2, productivity and inflation that is being proposed here. Velocity of money is assumed to be 1, so M2 is equal to Nominal GDP.

M2 is a category within the money supply that includes all physical money such as coins and currency demand deposits, in addition to all time-related deposits, savings deposits, and non-institutional money-market funds.

The calculations in Table Two are under a scenario where the home currency is not appreciating as a result of increased economic growth and FDI; in which case the real GDP growth would sustain at a higher level and inflation would tend to fall earlier. The GDP per capita would grow five times by the end of the fifth year, bringing Pakistan into the mid-level per capita income bracket.

This seems to be quite an achievable feat. A feat that is going to transform the entire perception of Pakistan on the global economic landscape, and which may catapult Pakistan into a vibrant growth story.

Caveats

Policy to focus on value addition ie import of raw material, value addition in Pakistan, and export of value added finished products. In order for economic growth to be sustainable, such an economic transition is extremely important.
Extremely strong regulatory framework to keep speculative activity in check, especially in assets whose supply is naturally limited; eg real estate.

Pakistan should not choke gas supply to industries. The estimated recoverable gas reserves are 27 trillion cubic feet. The annual consumption is 1.2 trillion cubic feet, at which rate the reserves can last for almost two decades. Isn’t that enough to plan and arrange supply of alternate fuels?

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It’s early morning in Karachi, Pakistan’s biggest city, and Muhammad Nasir is outside his makeshift shelter of palm leaves, rags, and bamboo, washing up after breakfast. He uses water stolen from a nearby supply pipe that belongs to the local water utility. The 17-year-old bids farewell to his mother, an unlicensed midwife, and walks to his tire-repair shop, an open-air stand in a residential area with a table of tools and a wooden bench. He checks to make sure the electricity he’s drawing illegally from the overhead power line is on so he can run his tire pump. Then he sends 10-year-old Abid, one of his two employees, along with 12-year-old Irfan, to get tea from a nearby shop.

Nasir’s business, his home, his power and water supply, and even the cup of tea Abid brings him don’t exist in Pakistan’s official figures. They’re part of another economy that doesn’t pay taxes or heed regulations. It probably employs more than three quarters of the nation’s 54 million workers and is worth as much as 50 percent of Pakistan’s 18 trillion rupee ($200 billion) official gross domestic product. And while the documented economy had its smallest expansion in a decade at 2.4 percent in the year ended June 2011, soaring demand for cars, cement for houses, and other goods shows the underground market is thriving.
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By Muhammad

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Excellent article. Some examples: beauty parlour who charges 300 for face wash & 5000 to 10000 for bridal makeup, Barber who charges 50 Rs for haircut and makes 1000-1500 a day, GP doctor who charges 100-200 per patient and makes 2000-4000 a day, Specialist doctor who charges 500-1000 per patient and makes 10,000-20,000 a day, surgeons who charges 10,000-200,000 per operation and makes 20,000- 500,000 a day, mason who charges 800-1200 a day, car mechanic who charges 300-2000 per car and makes 2000-10000 per day, Kirana shop makes 1500-15000 a day, Pan shop makes 800-1500 a day, small Vegitable seller makes 500-1000 a day, Moving Ice cream vender makes 500-1000 a day, Rickshaw driver makes 300-500 a day, Tution teacher makes 50,000-200,000 a month, Pharmacy makes 2000-10,000 a day but all these people do not pay any income tax or coporate tax or company tax or wealth tax.

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good read indeed. I think there is an urgent need to establish severe laws against tax evasion and curbs to tackle undocumented underground economy. One could only hope the next government is sincere and does so. This would mean more revenue for the state to spend on development.